State Industrial Promotional Corporation Of Tamilnadu (SIPCOT) provides financial assistance to medium and major industries is in the form of:   

1. Term Loan under Normal Scheme   

2. Term Loan under SIPCOT own funds.   

3. Term Loan for Larger Projects.   

4. Term Loan under Equipment Refinance Scheme.   

5. Equipment Lease Financing.   

6. Bill Discounting Scheme for Capital goods (for manufacturers)   

7. Corporate Short Term Loan towards LC Margin.   

Term Loan Scheme   

SIPCOT extends term loan assistance to new units, expansion, diversification and modernisation schemes as well as for purchase of balancing equipment. SIPCOT can extend long term loan upto Rs. 150 lakhs to new units promoted by first generation entrepreneurs and for Partnership Firms upto Rs. 90 lakhs. Minimum term loan requirement should be Rs. 100.00 lakhs for new limited companies.   

Term Loan Assistance under SIPCOT own funds    

SIPCOT extends term loan assistance to existing industrial units with proven track record and going in for expansion, diversification and modernisation scheme as well as for purchase of balancing equipments. SIPCOT can extend term loan upto Rs.500.00 lakhs out of its own funds for the projects costing upto Rs. 2000.00 lakhs promoted by existing companies with proven track record.   

Term Loan for Larger Projects    

Assistance under the scheme will be granted to medium and large scale industrial concerns for setting up of new industrial projects and / or for expansion and diversification upto a maximum of Rs. 16.00 crores. To avail this facility, the company should be in operation for atleast three years with two years net profit / positive networth and good track record with financial institutions.   

Equipment Refinance Scheme    

Assistance under this scheme for a maximum term loan of Rs. 250.00 lakhs is available to the existing industrial concerns for purchase of identifiable equipments. The existing unit should have been in operation for atleast 4 years and should have made profit atleast during the preceding 2 financial years. The company should have proven track record in fulfilling its obligation with financial Institutions / banks.   

The details of limits on project cost and term loan component are given below :   
  

Proven Track Record Shall Mean  :  

• those units which have been in operation for 3 years in continuous period.   
• those who have earned net profits and / or declared dividend on equity shares during the preceding two financial years.   
• not in default / overdues to institutions / banks in payment of their dues and the opinion from financial institutions / banks should not be adverse.   
• those units should have positive networth. 

Processing Fee   
The application for financial assistance has to be submitted along with a processing fee of 0.25% of the term loan sanction for the project cost upto Rs. 10.00 crores. For the project cost upto Rs. 20.00 crores with term loan of Rs. 500.00 lakhs under SIPCOT own funds, the processing fee will be 0.25% on the term loan applied for. For larger projects the processing fee will be 0.25% on the term loan sanctioned.   

When the Project appraisal is involved with public issue through SEBI / OTCEI, a service charge of 0.25% on the project cost will be levied apart from the normal processing fee on term loan.   

Up front fee : 1% on the Term Loan sanctioned.   

Interest Rate Structure   
The interest rates are competitive. The present applicable interest rate may be obtained from the Project Finance   
Department   

Lease Finance   

Under the Equipment Lease Finance Scheme, SIPCOT provides convenient lease financing for the acquisition of plant, machinery and the equipments. This scheme is exclusive to existing profitably-run industrial units which wish to expand, modernise or diversify their activities.    

Eligibility   

All industrial concerns which are eligible for availing of term loan from the Corporation can get assistance under this scheme. Besides, such concerns should have :   
been in production for the last three years,   
earned net profit for the last two years,   
a positive networth,   
been regular in repayment to banks / financial institutions. 
Only new indigenous or imported equipment from suppliers or manufacturers who are reputed are eligible for leasing. 

Bill Discounting Scheme for Capital Equipments   

Objectives   
SIPCOT is providing Deferred Credit to the purchasers of Capital goods / Equipments from manufacturing units situated in Tamil Nadu.   

Eligibility Criteria   

Seller (Capital Goods Manufacturer)   
All Capital goods / Equipment manufacturing units situated in Tamil Nadu are eligible.    
Besides, such concerns should have :   
been in production for the last three years,   
earned net profits for the last two years.   
been regular in repayment to Banks / Financial Institutions. 

Purchaser  
The company should be a manufacturing company situated in Tamil Nadu. Besides, such concerns should have:   
good track record and positive networth,   
been regular in repayment to Financial Institutions / Banks,   
been able to provide Counter guarantee / Bank guarantee for discounting the bills on its behalf. 

Interest Rate   
Industrial units / Entrepreneurs may obtain the present rates from the Financial Service Department.   

Corporate Short Term Loan towards LC Margin    

The assistance under the scheme is towards LC Margin for import of equipments (capital goods) till the term loan is sanctioned and released by the financial Institutions / Banks.  The minimum and maximum amount of assistance under the scheme is Rs. 25.00 lakhs and Rs. 10.00 crores respectively.  The maximum period of loan is two years.  The promoters' contribution is 25%.